Livspace lays off 1,000 employees amid co-founder exit and AI shift

Livspace has laid off around 1,000 employees, nearly 12% of its total workforce, as part of a phased internal reorganisation. The firm said the move is aimed at becoming an AI-native organisation. However, the massive layoffs also come amid a lack of external funding over the past four years and the absence of a clear roadmap to profitability.

While the company said 12% of employees would be impacted, a report by Moneycontrol claimed the figure could be as high as 25%.

Livspace had previously reduced its workforce by 2% in March 2023, and in May 2020 laid off around 450 employees amid Covid-19 lockdowns.

In a statement, the company said the workforce reduction was not a reactive cost-cutting measure but a “strategic reallocation of resources” driven by deeper integration of artificial intelligence and automation across its core functions, including sales, design, ops, and marketing.

According to Livspace, it has deployed advanced AI agents to handle several tasks that were earlier performed manually. 

The company added that the transition took place gradually over the last six months as it tested and deployed AI systems across functions, ensuring service quality was maintained as roles were phased out.

Alongside the operational changes, Livspace also confirmed a leadership transition. Co-founder Saurabh Jain has decided to step away from the company after 11 years to pursue personal interests. 

Founded in 2014, Livspace has raised over $450 million in funding from investors including KKR, Jungle Ventures, and Venturi Partners. The company became a unicorn in 2022 after raising $180 million led by KKR. 

For the fiscal year ending in March 2025, Livspace reported revenue of Rs 1,460 crore, while narrowing its losses by 42% during the year. It operates across India, Southeast Asia, and the Middle East.

While Livspace said the layoffs are part of its shift to becoming an AI-native organisation, the move does not appear to be guided by AI adoption alone. The prolonged lack of funding and the absence of a clear path to profitability seem to be key factors behind the workforce reduction.